NYC Relying Less on Financial Sector

By Darryl K. Taft  |  Posted 2011-09-22

Mayor Bloomberg: NYC to Surpass Silicon Valley in Tech Startups

NEW YORK-New York City Mayor Michael Bloomberg said he believes New York could soon replace Silicon Valley as the go-to location for high-tech startups to sprout.

Speaking at IBM's THINK Forum here, also known as "THINK: A Forum on the Future of Leadership," Bloomberg said New York has replaced Boston as the second-place location for startups.

"In terms of technology, I'm proud to tell you our city passed Boston to become the second largest recipient of venture capital funding for technology company startups behind only Silicon Valley."

Bloomberg said a city project in the works that will enable a top university to build a new science and engineering center in the city will change the technology landscape and make New York a magnet for technology entrepreneurship. In short, New York's so-called "Silicon Alley" could grow to truly rival Northern California's Silicon Valley, Bloomberg claimed.

Noting that "We can't be second at anything; we're New York," Bloomberg said his deputy mayor for economic development, Robert K. "Bob" Steel, a 30-year veteran of Goldman Sachs and former Under Secretary of the U.S. Treasury, "has come up with a program where we're offering to provide prime New York City real estate at virtually no cost in exchange for a university's commitment to build or expand a world-class science and engineering campus here in our city. These are the fields that really put a premium on innovation and will become increasingly important in the 21st century."

According to Bloomberg, Stanford University is trying to partner with a local university to get an edge up. A Wall Street Journal report indicates that the local university is the City University of New York (CUNY).

"They've formed a committee to raise a billion dollars to finance their part," Bloomberg said. "The president of Stanford is here at least every two weeks. The good news is that that's not the only university doing that. Cornell is making a very extensive effort to win the competition, and there are schools from around the country and around the world that are forming partnerships, and we expect some great proposals by the end of October. We'll then select one or possibly two and that probably will change the landscape for New York City for the next 50-odd years because all of the new high-tech companies that you see being started up in Palo Alto will be started right here."

According to the WSJ, the joint Stanford/CUNY proposal is the leading or favored bid in the competition, and the partnership plans to build an engineering and applied sciences campus on Manhattan's Roosevelt Island. In addition to Cornell, other schools based in the state of New York have also tossed their hat in the ring, including Columbia University and New York University.

The WSJ reports, "Stanford is looking at a 10-acre strip of Roosevelt Island for a campus-one of several sites offered by the city-envisioning a faculty of 100 and a graduate-student body of 2,200."

Stanford has been a hotbed for tech startups, and with its track record and an endowment that is larger than Columbia and NYU combined, a presence in New York could boost interest and investment in the city.

NYC Relying Less on Financial Sector


Bloomberg said high tech has become a larger focus for New York because the city is moving to diversify its economy to rely less on the financial sector.

"We are very dependent on finance," Bloomberg said. "We love finance; when it's good, it is great. But finance is a cyclical business. And when it turns south, one of the things in government is we cannot reduce our expenses the way you would in the private sector."

In fact, said Bloomberg, government expenditures increase when the going gets bad because government is called on to provide more services. "One of our solutions to the problem is to try to get rid of the down cycles in our revenue by diversifying the economy, geographically, through all five boroughs, but also across different industries that have low correlation to each other," he said. "So, for example, film, television, fashion, art and culture, tourism and modern manufacturing are things we are looking at. We are now the film capital of the world. We've become the fashion capital of the world. Each of these industries produces billions of dollars in revenue."

And technology is another one of those industries, Bloomberg said. That is partly why New York City has teamed with IBM to launch a new high school focused on technology, he added.

"We've turned around a public school system that was once a poster child for dysfunction into one that Washington now hails as a national model," Bloomberg said. In reforming public education, New York formed partnerships with a number of private companies including IBM, he said.

"And together with IBM and the City College of New York, we created a groundbreaking new school that opened its doors this year. It is called Pathways in Technology High School, or P-Tech, and it runs from grades 9-14. All students at P-Tech will learn the traditional core subjects, but they will also receive an education in computer science and complete two years of college work. So when they graduate from grade 14 with an associate degree and a qualified record, IBM has said that they will be first in line for jobs at IBM."

Indeed, students at P-Tech will also help New York further its goal to diversify its local economy by supporting the industries that have growth potential and expansion.



Rocket Fuel